Arla Incentive Scheme Aims to Speed up Climate Action

Ambitious climate strategies are a must in the global dairy industry. At Arla Foods, the farmer owners are taking proactive steps to reduce GHG emissions. A broad focus on efficiency has cut emissions from their milk production by nine percent a kilo since 2015.

Now a new sustainability incentive is helping to accelerate progress towards the goal of a 30 percent reduction in GHG emissions by 2030, with 2015 as the baseline. For the farmers, it brings an opportunity to earn up to 2.4 eurocents more per kilo of milk, ris- ing to 3 eurocents when the scheme is fully implemented.

Arla has based the incentive model on data obtained from its comprehensive Climate Check tool. For the latest Climate Check re- port, close to 8,000 farms across Denmark and six other European countries used the tool to submit data about their climate foot- print – a contribution already rewarded with an extra eurocent per kilo.

Analysis of this huge dataset has revealed the ‘Big Five’, which are the primary levers of the sustainability incentive’s point-based system. These are the main drivers of the dif- ferences between low and high-performing farms and represent the greatest opportuni- ties to cut GHG emissions while increasing efficiency and profitability.

A broad focus on efficiency in their milk production has cut ghg emissions by 9%

For each action in these areas, farmers can score points that translate into an additional payment. The bigger the improvement po- tential for climate and nature, the more points can be collected. Categories include feed, fertiliser and protein efficiency, land use, animal robustness, manure handling, biodiversity, carbon farming, sustainable feed and renewable electricity

Although the sustainability incentive is a voluntary scheme, 95 percent of Arla farmers – representing 99 percent of the farmer-owned milk pool – have registered their data in the Climate Check, which is a precondition for participation.